Recently there has been an air of pessimism regarding the economies of Europe and the United States. European countries are in the process of major cutbacks to try and reduce their deficits. In the U.S. Ben Beranke, the president of the Federal Reserve stated on July 21st that “The economic prospects for the States are uncertain, economic growth would be moderate, and the recovery in the job market would be slow. On the other hand in Latin America things look a lot better.

The World Bank is painting an optimistic picture for Latin America. According to CEPAL (Latin American Economic Commission) the region will experience a 5.2 percent growth in 2010. The rate predicted is double that of the United States and four times that of Europe. At the same time Latin America’s public debt is half that of the United States and Europe. In terms of deficits I would like pointed out that gross national product is an average of 2.3 percent in the region while the GPA in the U.S. Is 10.6 percent and 6.8 percent for Europe.

Using the aforementioned figures Luis Alberto Moreno, the president Of the Interamerican Development Bank (BID), published an article titled, “The Decade of Latin America.” In it he states that, “Our region has a historic opportunity to join the Asian countries in the vanguard of the world economic recovery.” The executive secretary of CEPAL shares the same optimism and emphasizes the vigorous economic and health financial recovery of the region.

During my frequent lectures, private consultations and on my monthly retirement tours I am constantly asked about the safety of investing in Costa Rica. I am quick to emphasize the country’s stability, the fact that we were not hit nearly as hard as the U.S. and Europe by the the economic downturn and that we are actually in better shape as the figures in this article clearly demonstrate.

On my monthly retirement and relocation tours I am always asked questions about Nicaragua. There is no doubt that some parts Nicaragua are more affordable than Costa Rica. However, there are homes in San Juan del Sur which cost almost around a half of a million dollars. I saw them featured on the International Home Finders Channel. So, the country isn’t as cheap as it is made out to be. The bottom line is that prices are not the main factor when considering Nicaragua as a place to live. Nicaragua has been striving for years to become the “next Costa Rica.” However, the country has a long road to travel to even be considered a contender.

Fist and foremost, Nicaragua’s political situation is downright scary. According to the country’s constitution President Daniel Ortega cannot seek re-election next year, but that’s not going to stop the onetime leftist revolutionary. Recently, he won a ruling from a Supreme Court stacked with his supporters that Article 147 of the constitution, which bans the re-election of a sitting president, doesn’t apply to him. Ortega is setting the stage to rule Nicaragua for a long time himself in defiance of the constitution. This is the only country in the world where the court has declared the constitution unconstitutional.

Even more frightening is the fact that Ortega supports dangerous crackpots like Venezuela’s President Hugo Chavez and Iranian leader Mahmoud Ahmadinejad. Ortega’s links to Chavez have been strong and lucrative and they include a juicy deal in which Venezuela sells Nicaragua crude oil at half price, which Ortega can resell, using the profit for whatever he wants. Furthermore, Nicaraguan President Daniel Ortega is accused of dipping into Venezuela-funded coffers to bribe, buy and scatter the weakened opposition as part of his push for a second term.

More and more baby boomers are choosing to relocate or retire in Costa Rica. This should come as no surprise because of the country’s stellar and squeaky-clean international reputation. Costa Rica has more American residents per capita than any other country outside of the U.S. – they can’t be wrong.

Lately there has been a lot of hype by international retirement magazines and private parties promoting Medellín, Colombia and Cuenca Ecuador as as more affordable versions of Costa Rica. Medellín is one of Colombia’s most beautiful cities and does have some things to offer. However, you are comparing one city and a country that has some serious issues including a civil war with peaceful Costa Rica. I have some friends who have moved to Medellín and like it. However, they are people who couldn’t find success and happiness in Costa Rica due to a variety of factors and moved on hoping to improve their lives.

Despite all of the hype Cuenca is not all that it is cracked up to be either. Again you are just looking at one city and not the whole country. If you are an older retiree and have any type of breathing problem you are bound to have problems at 8,200 feet above sea level. I know of several older Americans who had problems in Costa Rica’s Central Valley which is only a few thousand feet above sea level. They would probably drop dead in Cuenca due to the rarefied air. Also, the average temperature is 58 degrees which may make the place too cold for those seeking warm weather. On the other hand, the average year-round temperature in Costa Rica’s Central Valley is around 72 degrees and purportedly one of the best climates in the world according to several publications. Costa Rica has almost any micro climate from which to choose. Which place would you choose to live?

People talk about the affordability of Cuenca and Medellín. The quality of life is much better in Costa Rica. Don’t make the mistake of confusing affordability with quality of life. The bottom line is that you get what you pay for. Furthermore, Costa Rica is the ONLY country in Latin American with a time-tested organization dedicated to help foreigners who want to relocate there. The Association of Residents of Costa Rica offers one-of-a-kind services to help you more here almost seamlessly. That is why I include their informative seminar as part of my popular monthly relocation/retirement tours.

Finally, I talked with a good friend of mine who has the largest Latin American travel agency based in the United States told me that despite what people say Medellín has a serious crime problem and Cuenca is downright depressing. Furthermore both Colombia and Ecuador have standing armies which Costa Rica does not.

My friend’s business is to know all of the tourist destinations in Latin America and be an expert on the subject. I respect his opinion highly and consider him an expert on the subject. In fact, due to his expertise he has been a consultant for the U.S. in Latin America.

Costa Rica doesn’t have the near the number of retirees that Mexico has, but it is 1000 times safer

Mexico currently has around 1,000,000 retirees because of its proximity to the U.S. The Mexican government says that it wants to lure 5,000,000 retirees form the U.S.and Canada in coming years. This is really a “pipe dream” since an epidemic of violence is extending its evil tentacles throughout the country. A battle for control of the profitable drug trade by the cartels has brought the drug war closer to the heart of Mexico, terrifying the city of Cuenravaca. Known for its charming Spanish-colonial downtown and for posh homes with lush gardens and swimming pools, Cuernavaca, “The City of Eternal Spring,” has always been has been a favorite retreat for Mexico’s rich and powerful and U.S. retirees.

Unfortunately drug-gang violence has soared claiming nearly 23,000 lives throughout Mexico, with Cuernavaca becoming the latest front. “We hadn’t seen this violence before,” said Dawn Housand, a 60-year-old Boston native who moved to Cuernavaca to retire more than 10 years ago looking for a quiet place to live. “I don’t have the money to move. If I did, I would leave.”

This is a city that depends on tourism and what violence has done is collapse our economy,” said club owner Andres Remis, president of the Cuernavacan Nightclubs and Bars Association. “The only thing that we can do is to wait for one of the groups to win or for the army to win.”

More than 50 people have been killed this year in Cuernavaca’s gang battles.

As I have mentioned before at the rate things are going in Mexico, the country will be hard press to attract many retirees. On the other, Costa Rica is fast becoming the number one retirement haven in Latin America. When you listen to the news or television and Costa Rica is mentioned, all that you really hear about is the country’s natural wonders and other positive information. The country is not crime free but fortunately doesn’t suffer from the endemic violence that plagues Mexico and some of the other countries in the region.

A staff team from the International Monetary Fund (IMF) visited Costa Rica during April 7–13, 2010 to conduct the third and final review of the Stand-By Arrangement (SBA) approved in April 2009. The mission met with Finance Minister Jenny Phillips, Central Bank Governor Francisco de Paula Gutiérrez, other senior officials, and representatives of the financial sector.

After the conclusion of the discussions, Mr. Marco Piñón, the IMF mission chief for Costa Rica, made the following statement:

“The economic recovery in Costa Rica is firmly underway. Economic growth rose in the second half of 2009 and remained strong in the first quarter of 2010. Consumer and business sentiment have firmed up and financial conditions have continued to improve. Adjustments in administered prices have pushed inflation to 5.8 percent in March, compared to 4 percent at end-2009, but underlying inflation has remained stable close to 4 percent. Overall, the rebound in activity has been stronger than originally anticipated.

“The economic outlook has also improved since the previous review in December 2009. The projection for output growth in 2010 has been revised to 3.8 percent (1.5 percentage points higher than before). Inflation is expected to be close to the upper end of the central bank’s target band of 4–6 percent in 2010.

“Performance under the precautionary SBA with the Fund has continued to be very strong, as the authorities met all quantitative performance criteria for end-December 2009 and preliminary data suggest that the end-March targets were also met.

“Overall, the authorities’ policy response to the crisis, supported by Fund’s SBA, has proved effective. The government’s strategy to shield the economy from external shocks with external resources, which in the event were not used, helped preserve confidence, maintain stability, and protect the most vulnerable groups. A supportive fiscal policy has provided a boost to the recovery and a cautious monetary policy has allowed inflation to move to low levels.

“The mission expects that the IMF Executive Board will consider the third and final review of the SBA in late-May 2010. The authorities have indicated that they will continue to treat the SBA as precautionary.”

Courtesy of Inside Costa Rica